If we ignore costs of climate regulation on average Americans, we risk a catastrophe
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The four Democratic Senators running for president in 2020 have all declared their support for a “Green New Deal” authored by New Representative Alexandria Ocasio-Cortez and Senator Ed Markey. The Green New Deal, released Thursday, calls for the United States to eliminate fossil fuel power sources in the next ten years. Its authors say that its costs are irrelevant because the “cost of inaction” is so high.
This approach is exactly wrong for climate change. The central fact of climate regulation is that both climate change and climate change regulation can impose catastrophic costs on citizens of the United States and the world. As the world warms, we will all have to spend more to protect ourselves from climate change. And climate regulation will force us all to pay more for nearly every aspect of our lives—for power, for fuel, for housing, for every item we buy. Any plan that ignores one of these costs threatens disaster.
The world’s premier climate change economist is William Nordhaus. His 2018 Nobel Prize in Economics was widely celebrated for showing the dire risks of climate change. In his Nobel lecture, he warned that unrestrained climate change could cost the world more than $20 trillion—about $3,000 for every man, woman, and child on the planet.
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DESPITE GREEN NEW DEAL PUSH, CLIMATE CHANGE NOT A HIGH PRIORITY FOR PEOPLE IN 2019
But Nordhaus also warned that climate regulation could impose even more catastrophic costs. World climate accords like the Paris Agreement aim to keep climate change under two degrees Celsius. Nordhaus acknowledged that this aggressive goal would limit the cost of climate change to $6 trillion, but showed that it would cost the world $36 trillion—about $5,000 for every man, woman, and child.
As the world warms, we will all have to spend more to protect ourselves from climate change. And climate regulation will force us all to pay more for nearly every aspect of our lives—for power, for fuel, for housing, for every item we buy. Any plan that ignores one of these costs threatens disaster.
The world’s foremost expert on the harm of climate change is telling us that the world’s over-aggressive goals are so catastrophic that they are worse than doing nothing at all. Partisans on both sides may disagree with Nordhaus’s numbers, but the key point is that both climate change and climate regulation can cost the world trillions. The key question for climate regulators is how to minimize both costs: the cost of climate change and the cost of combating climate change.
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As we consider climate regulation, we need to avoid two common misunderstandings. The first comes from those who oppose climate regulation: “We’ll never stop climate change—why should we pay so much to try to do the impossible?” Nordhaus shows the answer: unrestrained climate change will cost us trillions so even if we can’t stop it there is plenty of room to take affordable steps and push that cost down.
The second misunderstanding is the one behind the Green New Deal: “Climate change is so dangerous—let’s pay what it takes to stop it.” If we ignore the costs of climate regulation on ordinary citizens, we risk a catastrophe even worse than climate change.